Nothing But A Proxy Litigation: Supreme Court Upholds Cancellation Of Lease Where Allottees Repeatedly Defaulted In Making Payments
The Supreme Court upheld the order of the Estate Authorities cancelling the lease deed issued in favour of original allottees as they repeatedly defaulted in making the payments. The Court observed that the litigation carried forward by the alleged tenant was nothing but a proxy litigation on behalf of the original allottees.
The Appeal before the Apex Court arose from the impugned Orders passed by the Punjab and Haryana High Court whereby the writ petitions of the allottees and the tenants were allowed.
The Division Bench comprising Justice Bela M. Trivedi & Justice Satish Chandra Sharma asserted, “Under the circumstances, despite sufficient opportunities of hearing given to the allottees to clear the outstanding dues, the respondents – allottees had failed to clear the same.”
Advocate Varun Chugh represented the Appellants while AOR Umang Shankar represented the Respondents.
The appellant in this case had sold the Booth site located at Sector 46-C of Chandigarh to the respondents – Manjit Kumar Gulati and Ors. (allottees) in an open auction on a 99 years leasehold basis in 1989. The allotment letter was issued to the allottees on payment of 25% of the premium amount of the auctioned site. The balance 75% of the cost of the auctioned site was to be paid by the allottees in three equal annual installments. A show cause notice was issued under Rule 12 (3) of the Chandigarh Lease Hold of Sites and Building Rules, 1973 to the allottees when payments were not made by them. Thereafter, a number of times, opportunities were granted to the said allottees for personal hearing however, they failed to appear before the concerned authorities.
As a result, the Assistant Estate Office cancelled the lease of the said respondents – allottees. The allottees being aggrieved by the same, preferred an appeal before the Chief Administrator and an Order was passed directing the respondents to pay the entire amount of premium within 15 days. The respondents – allottees, approached the Advisor by filing a petition which came to be dismissed. The alleged tenant – M/s. Mohit Medicos, also filed an appeal challenging the order of the Assistant Estate Office, which came to be dismissed. Thereafter, the allottees and the alleged tenant filed separate writ petitions challenging the orders passed by the Authorities and seeking restoration of the site in question. Both the writ petitions having been allowed by the High Court, the appellants preferred the instant Appeals before the Apex Court.
One of the arguments raised by the appellants was that in exercise of its jurisdiction under Article 226, the High Court should not have interfered with the said orders passed by the statutory authorities.It was also submitted that the respondent – M/s. Mohit Medicos alleging to be the tenant is the proxy litigant and had no locus standi to file the writ petition when the said respondents had failed to produce any document to show any lease agreement between the original allottees and the said respondents - tenant.
On the other hand, the Counsel for the Respondents referred to the judgment of the Punjab and Haryana High Court in Brij Mohan Vs. Chief Administrator and others, AIR 1980 P&H 236 and submitted that the expression “transferee” contained in clause (k) of Section 2 of the Capital of Punjab (Development and Regulation) Act, 1952 included the “lessee”, and therefore the respondent(s) – M/s. Mohit Medicos had the locus standi to file the writ petition.
The Bench was of the view that despite sufficient opportunities of hearing given to the allottees to clear the outstanding dues, the respondents – allottees had failed to clear the same. “Hence, the High Court had committed gross error in allowing the writ petitions by holding that the tenant, i.e., M/s. Mohit Medicos was not served with the notice of resumption with regard to the plot in question. Admittedly, there was no document whatsoever produced by the said alleged tenant to show that it was the tenant of the original allottees - Manjit Kumar Gulati and Ors”, it said.
The Bench further observed that when the original allottees themselves had failed to comply with the conditions of auction sale, and when the allotment itself made in favour of the said allottees was cancelled by the Statutory Authority after following the due process of law, there was no question of serving any notice to the so called tenant especially when there was nothing on record to suggest that M/s. Mohit Medicos was the tenant of the original allottees.
As per the Bench, the decision of Punjab and Haryana High Court relied upon by the respondents - tenant had no application to the facts of the present case, inasmuch as the respondent(s) – M/s. Mohit Medicos couldn’t be said to be a tenant of the original allottee.
“The litigation carried forward by the said alleged tenant is nothing but a proxy litigation on behalf of the original allottees, who were the defaulters and an abuse of process of law”, the Bench held while allowing the appeal and setting aside the High Court’s judgment.
Cause Title:Chandigarh Administrator & Ors. v. Manjit Kumar Gulati & Ors. [Neutral Citation:2024 INSC 959]
Appearance:
Appellants: Advocate Varun Chugh, AOR Shreekant Neelappa Terdal
Respondents: AOR Umang Shankar
